XAU/USD: the dollar drops before the performance Janet Jellen

With the
opening of today's trading day, and especially at the beginning of the European
session, the dollar is falling in the foreign exchange market. Published
yesterday, data from the US Department of Commerce showed a reduction in orders
for durable goods in May by 1.1% compared to the previous month, which was the
strongest decline in six months. Demand for durable goods in the US in May fell
for the second consecutive month.

Other
macro data from the US also come out with weaker indicators. So, published on
Friday, indicators of activity in the manufacturing and services sectors in the
US declined in June. The preliminary index of supply managers (PMI) for the US
manufacturing sector in June fell to 52.1 against 52.7 in May, reaching a
9-month low. The preliminary index of supply managers (PMI) for the US service
sector fell to a 3-month low, reaching 53 versus 53.6 in May.

The
decline in macroeconomic indicators and the low level of inflation in the US
can not but worry the Fed leaders.

Previously,
the Federal Reserve raised the key interest rate to a range of 1% -1.25%,
saying it expects another rate hike this year. However, market participants do
not believe that the Fed can really proceed with further tightening of monetary
policy amid weak data on inflation in the US.

"The
US Federal Open Market Committee can refrain from actions and analyze the
development of the macroeconomic situation in the coming quarters", said
Fed President St. Louis James Bullard on Friday.

Today,
market participants will wait for the speech of the head of the Fed, Janet
Yellen, which will start at 5:00 pm (GMT). If Janet Yellen again signals about
the Fed's inclination to tighten monetary policy, confirming its view that
slowing inflation is a temporary phenomenon, then the dollar will quickly
regain its positions in the foreign exchange market.

According
to the CME Group, futures for interest rates by the Fed indicate that the
probability of another increase in the Fed's rates this year is about 50%.
Rising rates usually support the dollar, making it more attractive to
investors. At the same time, prices for precious metals, denominated in US
currency, are declining.

*)An
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Support and resistance levels

Meanwhile,
the price of gold is growing with the opening of today's trading day. The pair
XAU / USD pushed back from the support level of 1245.00 (EMA144, EMA200 on the
daily chart), however, its growth stopped at the short-term resistance level of
1253.00 (EMA200 on the 1-hour chart).

The pair
XAU / USD is in the descending channel on the 4-hour chart. More seriously to
the recovery of the upward movement of the pair XAU / USD can be attributed
only after its consolidation above the resistance level 1257.00 (EMA200, EMA144
and the top line of the descending channel on the 4-hour chart).

If
the trend of strengthening the dollar will gain momentum, then the price of
gold will continue to decline gradually. The return of the pair XAU / USD into
the zone below the key support level of 1245.00 will strengthen its negative
dynamics.

The breakdown
of the support level of 1220.00 (the Fibonacci level of 38.2% correction to the
wave of decline since July 2016) will increase the risks of a return to the
downtrend.